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Health care providers worry about proposed Medicaid, MinnesotaCare cuts
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Lisa Edstrom, the executive director of the Neighborhood Health Care Network, says proposed cuts to state and government health insurance for the poor could cut out the health care safety net. (MPR file photo)
Officials representing health clinics, hospitals and nursing homes are worried about President Bush's proposed $45 billion cut to Medicaid. The federal andstate health insurance program for poor adults, the elderly and children is a target in President Bush's $2.57 trillion budget. Critics say it's especially troubling because the cuts come at a time when cuts to state subsidized health insurance are on the table.

St. Paul, Minn. — It's never a good time to be without insurance or to need government-funded health care, but this year may be particularly troubling for people in that situation.

Lisa Edstrom, the executive director of the Neighborhood Health Care Network, which operates low income health clinics and outreach services across Minnesota, says proposed cuts to state and government health insurance for the poor could cut out the health care safety net.

"If I were in that situation right now, I'd be very concerned about making choices between housing, health care and just general 'How am I going to live and be healthy?'" she says.

And this is coming from someone who could see an increase in funding under the Bush budget. The president has proposed a funding increase to build additional health clinics in poor neighborhoods. In total, the president would spend $2 billion next year on such projects nationwide.

Despite the proposed increase, Edstrom is concerned more of the uninsured will be visiting her clinics. Gov. Pawlenty has proposed cutting 27,000 people from the state-subsidized health insurance program, MinnesotaCare, by the end of next year.

Edstrom says government officials need to rethink how to improve health coverage as opposed to cutting people off of programs.

"There should be some complementary strategy rather than saying, 'Let's expand community health centers as a substitute for addressing coverage issues,'" she says.

The Bush budget provides about $4 billion in tax credits to states to create purchasing pools to help the low income buy health insurance.

One place the uninsured may go when they're really sick is the hospital emergency room. And that worries Bruce Rueben with the Minnesota Hospital Association. He says the cuts to government health insurance, combined with Gov. Pawlenty's proposed cuts in hospital reimbursements, will squeeze hospitals.

Rueben says hospitals will see fewer government dollars at a time when they'll see an increase in uninsured patients. He says the uninsured can't pay their bills, which means an increase in uncompensated care costs.

"We obviously have a tremendous assault on the safety net program for the poor. And what we're going to have to do is figure out a way to preserve access to care for Minnesota's poor and work smarter," Reuben says.

An official with the Bush administration says the cuts to Medicaid will squeeze the anomalies out of the system. But critics say cuts to government programs are likely. The consumer group Families USA estimates Minnesota would lose $712 million over the next 10 years under the Bush plan.

Christine Bronson, Medicaid director for the Minnesota Department of Human Services, says she's not sure how the state would handle any cuts if the budget became law. Bronson says she's encouraged by some proposals in the budget, particularly allowing states greater administrative flexibility. "It's always preferable to find ways to minimize administrative costs and unnecessary service provisions, than it is to look at issues of eligibility and severe benefit restrictions," Bronson says.

But the state could lose money in other areas. Rick Carter, with the nursing home trade group CareProviders of Minnesota, says Minnesota stands to lose at least an estimated $70 million in federal nursing home funding if the Bush budget is approved. He says the state increased a provider tax on nursing homes with the knowledge that the federal government will match the money. The Bush administration called it "double-dipping" and wants to cut the payment.

Carter says that proposal, along with additional reductions to Medicare and Medicaid, could be troubling to the state's nursing homes.

"It will put additional pressure on beneficiaries, and providers, and people who work in long-term care facilities and related institutions. And frankly, it will put a huge amount of pressure on our state government," Carter says.

Several members of Minnesota's congressional delegation, including members of the president's party, say they're not happy with proposed Medicaid cuts. Republican Sen. Norm Coleman said the Medicaid cuts are out of line, given rising health care costs and already strained state budgets.

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